Esther Cepeda: The business of black America

Wednesday

Apr 16, 2014 at 5:14 PM

The National Urban League's 2014 report on the state of black America released a torrent of negative assessments. “Dismal and getting worse,” read one headline. “Blacks behind whites, Latinos in job market, report says,” read another.

Esther Cepeda

The National Urban League’s 2014 report on the state of black America released a torrent of negative assessments. “Dismal and getting worse,” read one headline. “Blacks behind whites, Latinos in job market, report says,” read another.

While superficial, these summaries do contain one truth: On measures of economics, health, education, social justice and civic engagements, African-Americans have realized less of the American Dream than have their white and Hispanic peers.

Indeed, the Urban League report notes, 56.5 percent of African-American households are less than middle income compared to 50.8 percent of Hispanic and 35.5 percent of white households.

But that’s far from the end of the story. Dig deeper and you’ll find that the African-American community possesses untapped potential that represents authentic opportunities.

As a bright counterpoint to the gloomy news about blacks’ current well-being, half of the 12 essays included in the Urban League’s annual appraisal were about the topic of entrepreneurism.

Randal D. Pinkett and Jeffrey A. Robinson, both entrepreneurs as well as scholars, call entrepreneurism no less than “the most important vehicle of economic development in the black community.”

Donna Jones Baker is the president/CEO of the Urban League of Greater Cincinnati, which runs a variety of business development programs. She writes, “Being economically self-sufficient through owning your own business is not a new concept in the African-American community. We have traditionally owned the neighborhood grocery, the barber shop, the beauty parlor and the funeral home — all providing needed services and specializing in serving the African-American community. We recognize such businesses as the backbone of America in general.”

But African-American business ownership is not — and should not be perceived as being — limited to mom-and-pop shops.

“We see a wide diversity of interest in building different types of business from home health care, to mail and fulfillment enterprises, and telecommunications firms,” Baker told me. “And the rewards of that diversity aren’t just for the individuals creating their business, but for the community at large where those businesses then develop workforce needs and then begin to hire — it all works together for the benefit of the community at large.”

It’s not all rosy, of course. Pinkett and Robinson note that while they believe that entrepreneurs are the major wealth creators in America and entrepreneurism can transform the black community, “unfortunately, less than 5 percent of the black population is self-employed or engaged in founding and running registered businesses. Furthermore, the entrepreneurs who are making money in black communities are not black. Often, the wealth that is created through entrepreneurship doesn’t stay in the black community and, therefore, our communities do not reap the benefits of the kind of entrepreneurship that also invests in the local community.”

The answer these experts suggest to encourage new African-American businesspeople is business-focused education and workforce training, heavy investments in entrepreneurship programs and small business incubation programs, and better access to capital for up-and-coming minority entrepreneurs.

But it seems that what’s necessary above all is the fundamental reframing of the perception of African-Americans so that they are considered an underutilized pool of potential job creators just waiting to be tapped.

“In a study conducted by the Kauffman Foundation,” Pinkett and Robinson write, “it was noted that black Americans, and in particular black males, were the most likely to say they wanted to open their own business. Unfortunately, the statistics also tell us that blacks are the least likely to actually open a business.”

That has to be in no small part because the most common narratives about African-Americans have to do with incarceration, unemployment and underachievement.

It’s time to flip the script. We need to stop seeing the African-American community strictly as one in need of recuperative social services and begin to understand that it could reach its full potential if we invested in its inherent ability to be enterprising.